The Empirical Research On The Impact Of Corporate Governance On Credit Risk

The credit problem of enterprises has always been the focus of theory and practice.At present,as the development of China's capital market is accelerating,more and more investors gathered here,making the size of the stock market and bond market keep growing.But at the same time,various defaults and dishonest behaviors were staged in the capital market,which not only damages the interests of investors,but disturb the healthy operation of China's capital market seriously.Therefore,the enterprise's credit risk has become the most concerning problem for the majority of investors and regulators.However,the current theoretical research on the impact of corporate governance on credit risk mainly focuses on internal governance,not considering the impact of external governance,especially the external legal environment and the protection mechanism for investors.In order to make up for the deficiency,enrich and perfect the theoretical research on the influence of corporate governance on credit risk,this paper introduces the influence of external governance,especially the impact of the external legal environment on the credit risk.In this paper,two methods of normative analysis and empirical research are used to study the impact of corporate governance on credit risk.Firstly,analyze the relevant theories to corporate governance and credit risk,and put forward the hypotheses,and then build the model for empirical analysis,which first introduces the legal system of external governance.Study its direct impact on credit risk and the regulating effect between internal governance and credit risk.The research conclusions are as follows: the higher the overall level of internal governance,the smaller the credit risk;the external legal system helps to reduce the credit risk of the enterprise;the external legal environment plays a regulatory role on internal governance's effects on credit risk.Specifically,it weakens the influence of internal governance on credit risk.At the same time,this paper further studies the influence of the specific dimensions of internal governance on credit risk.The result implies that the proportion of the largest shareholder,the share concentration of the second to the tenth largest shareholder,CEO who also chairs of the board is positively related with credit risk;state-controlled,parent company owned and proportion of outside directors has a significantly negative correlation with credit risk;the influence of the total remuneration of top three executives on the credit risk is not significant.This study based on the scholars' research first introduces external governance,especially the factors of external legal environment,making the theoretical research about the impact of corporate governance on credit risk more perfect.At the same time,according to the results of the study,the paper has put forward credit risk control recommendations from the perspective of corporate governance,which has certain reference and practical significance for listed companies improving the governance structure,investors making investing decisions and financial supervision departments controlling the credit risk of listed companies.